Daniel Marron comments:

America’s tax system is needlessly complex, economically harmful, and often unfair. Despite recent revenue gains, it likely will not raise enough money to pay the government’s future bills. The time is thus ripe for wholesale tax reform.

1. Tax compliance places a large burden on small businesses, both in the aggregate and relative to large businesses.

The Internal Revenue Service estimates that businesses with less than $1 million in revenue bear almost two-thirds of business compliance costs. Those costs are much larger, relative to revenues or assets, for small firms than for big ones.

2. Small businesses are more likely to underpay their taxes.

Because they often deal in cash and engage in transactions that are not reported to the IRS, small businesses can understate their revenues and overstate their expenses and thus underpay their taxes. Some underpayment is inadvertent, reflecting the difficulty of complying with our complex tax code, and some is intentional. High compliance costs disadvantage responsible small businesses, while the greater opportunity to underpay taxes advantages less responsible ones.

3. The current tax code offers small businesses several advantages over larger ones.

Provisions such as Section 179 expensing, cash accounting, graduated corporate tax rates, and special capital gains taxes benefit businesses that are small in terms of investment, income, or assets.

4. Several of those advantages expired at the end of last year and thus are part of the current “tax extenders” debate.

These provisions include expanded eligibility for Section 179 expensing and larger capital gains exclusions for investments in qualifying small businesses. Allowing these provisions to expire and then retroactively resuscitating them is a terrible way to make tax policy. If Congress believes these provisions are beneficial, they should be in place well before the start of the year, so businesses can make investment and funding decisions without needless uncertainty.

5. Many small businesses also benefit from the opportunity to organize as pass-through entities such as S corporations, limited liability companies, partnerships, and sole proprietorships.

These structures all avoid the double taxation that applies to income earned by C corporations. Some large businesses adopt these forms as well, and account for a substantial fraction of pass-through economic activity. Policymakers should take care not to assume that all pass-throughs are small businesses.

6. Tax reform could recalibrate the tradeoff between structuring as a pass-through or as a C corporation.

Many policymakers and analysts have proposed revenue-neutral business reforms that would lower the corporate tax rate while reducing tax breaks. Such reforms would likely favor C corporations over pass-throughs, since all companies could lose tax benefits while only C corporations would benefit from lower corporate tax rates.

7. Tax reform could shift the relative tax burdens on small and large businesses.

Some tax reforms would reduce or eliminate tax benefits aimed at small businesses, such as graduated corporate rates. Other reforms—e.g., lengthening depreciation and amortization schedules for investments or advertising but allowing safe harbors for small amounts—would increase the relative advantage that small businesses enjoy. The net effect of tax reform will thus depend on the details and may vary among businesses of different sizes, industries, and organizational forms. It also depends on the degree to which lawmakers use reform as an opportunity to reduce compliance burdens on small businesses.

The economic crisis in Italy continues even in the prosperous north. In the province of Milan a project to stimulate new route out of poverty for families and individuals in need has been founded.

The town of Busto Garolfo, the Bcc Busto Garolfo and Buguggiate and parish Caritas have signed an agreement to create a new experimental project using microcredit. If the project is successful, it will be copied elsewhere.  Here is a concrete, local solution to economic problems.

The underlying philosophy is that of shared responsibility. Or rather, ” to aid each other ,” says the president of the Bcc Busto Garolfo and Buguggiate , Roberto Scazzosi . “As the local reality and reality as we have done credit cooperative of mutuality and to grow our core principles.  We write in our Charter of Values ​​”the goal of the Cooperative Credit is to produce utility and advantages, to create economic, social and cultural benefit of members and the local community and to build a foundation of trust.  We have taken the initiative.

The experimental project microcredit fits in collaboration initiated three years ago between the same three cities to create employment opportunities through community service.   Microcredit is a response to the needs characterized by uniqueness , simplicity and sustainability. That is, sudden and temporary needs that relate to basic needs – such as paying rent or utility bills, medical expenses – as long as there are conditions for a return of the loan. You want to stimulate the autonomy , responsibility, the ability of those who receive funding , putting him in a position to carry out the project to life.  In other words, let’s talk about education welfare, adds Don Ambrogio Colombo Busto Garolfo pastor and president of Caritas.  The post office network creates a driving force for growth. The concept of aid is a prerequisite for the growth of education and to ensure that those being helped today may one day help others.

Latest business school studies suggest:

Men appliy ethical standard relative to their role (or personal benefit) in transaction.

Wharton School asked if you had to decide on ingredients based on profit versus potential harm, women would not harm.  Men wanted profit.

Women targeted for deception by both men and women.

Women take themselves out of the game because they feel morally compromised.  Women may find a way to stay in the game and be ethical if they understand this dynamic.